The Chief Executive Officer (CEO) is the highest ranking position that actively oversees the management of an organization. He/she is someone who plays a pivotal role in guiding the company’s direction, embodying its mission and culture.
As such, to be a great CEO, one would need to win the confidence of others as a trusted decision maker and possess qualities of an ideal role model. This article will discuss the main responsibilities of a CEO and qualities of a successful one.
How do CEOs differ globally?
As a rule, the CEO occupies the highest decision-making authority at the management level, positions the company in the market for the long term, and is responsible to the stakeholders of the company (e.g. board of directors, shareholders, etc.). Although the function designation is often used internationally, the interpretation sometimes varies from country to country.
In Anglo-Saxon countries, a CEO is regarded as a job title in its own right. Whereas in European countries, such as Germany, Belgium, and Netherlands, it can be considered as an addition to an individual’s job description. In large listed corporate structures, the CEO is answerable to the Chairman of the Board of Directors. Whereas for smaller companies, a CEO may not be subjected to such levels of corporate governance.
Whichever interpretation of a CEO is taken, a commonality across all is that CEOs play a critical role in influencing the successes of companies. A capable CEO is one who is adept at performing multiple critical duties, while maintaining trust amongst his/her subordinates.
What are the responsibilities of a CEO?
While there are high variations on a CEO’s role from company to company, below is a list of critical responsibilities typical for most CEOs:
- Determining company strategic goals & targets: CEOs play a key role as the highest decision-maker to set strategic plans and policies. Then build a clearer picture for the organization through sensible targets to work towards. While they retain the decision making power, very often CEOs will consult with their management team when making these decisions.
- Managing “C-suite” officers: Management of their second layer officers such as the Chief Financial Officer or Chief Operating Officer is one of the key functions of a CEO. Once the management team has charted the course for the company, the CEO needs to ensure that the company is able to implement these decisions promptly. Hence through his/her direct reports, a CEO must ensure that information is well communicated downwards and the right processes are in place to realize it.
- Oversee budgeting and forecasting: CEOs are required to set up an annual budget for the company. This is done while taking into consideration factors such as company vision, income targets, competitive movements, etc. Once set, the role of monitoring and analyzing the budget will fall on the shoulders of the CFO.
- Becoming the company’s face: CEOs are often closely associated with the company. Hence, their personal conduct is viewed by both internal and external stakeholders as the principles held by the company itself. CEOs would then need to be an exemplary role model and address the public in a favorable manner.
Qualities that make a good CEO
Apart from being able to fulfill their responsibilities well, a good CEO should also have a set of complimenting soft skills. These skills ensure that companies under their management will consistently and reliably perform well in the market.
- Critical thinker
As a CEO, one would often be relied upon by many to make the right decisions. From achieving financial targets for shareholders, to developing plans for business development, the decisions to be made are endless. In order to consistently be able to make the optimal choice, CEOs need to hone their critical thinking. They need to be able to consider all available choices, even counter intuitive ones, and weigh them objectively. Furthermore, as these decisions often have widespread implications across the organization, CEOs would need to be able to take all these factors into consideration.
With new disruptions popping up in the market ever so often, CEOs need to maintain an agile mindset. A good CEO should be able to realize that change is not something that can be avoided, but rather embraced and built into the culture of the company. He/she should keep a vigilant eye on market developments that may impact the business, build mitigation plans quickly, and keep the company constantly ready to adapt.
- Collaborative mindset
Realizing one’s own limitations is key to becoming a great leader. Any organization is made up of so much complexity and internal workings that it is difficult to have a perfect grasp on everything. A good CEO should realize this and have the sense to seek advice from his/her team when making critical decisions.
Fortunately or otherwise, being the face of the company and viewed as a role model by employees, disappointments in a CEO are often magnified. Which is why maintaining trust at all times is a critical quality of a good CEO. Trust is built on transparency, even when it requires one to admit previous errors. Being able to openly discuss motivations of certain decisions, actively involve people in decision making and create a safe environment for people to voice opposing opinions would set a strong foundation in being trustworthy.
To be a good CEO is not something that is done instantly. One has to always be motivated to self-improve, emulate examples of good leadership, and avoid common pitfalls.
However, if done right, a good CEO can create a workplace that is welcomed by their subordinates and a good reputation for their company.
Do you want to find a suitable candidate for CEO at your company? Find it on Shortlyst. Start for free now!